THE AUTOEXTREMIST

February 10, 2010

Baseball, Hot Dogs, Apple Pie and Toyota? Not anymore.

By Peter M. De Lorenzo

(Posted 2/9, 10:30AM) Detroit. I really wasn’t going to write about Toyota again this week, figuring that I had said all that needed to be said last week about the situation (click on “Next Entry” at the bottom of the page to read last week’s column – ed.), but then again it’s obvious that the story of Toyota’s quality implosion and subsequent image freefall isn’t going away anytime soon.

Not when the vaunted Prius – the sainted darling of the Green intelligentsia - has now joined Toyota’s never-ending recall list. You could almost hear the Prius acolytes in California and across the country going face down in their bowls of edamame with the news that their glorious, supposedly guilt-free machines actually weren’t infallible after all. Oh, the horror.

No, this story – the classic tale of a company’s intransigent arrogance and unbridled hubris – is going to play out in the days, months and years to come.

First on the agenda are the hearings scheduled for today in Washington (NOTE: It was just announced that the hearings will move to February 24 due to weather conditions - ed) - where congressional committees stocked with lawmakers who have been courted, schmoozed and massaged by Toyota and its lobbying efforts over the last 25 years - will allegedly “get to the bottom” of the Toyota recall story.

Oh really? Let’s review, shall we?

In an absolutely devastating piece from the Associated Press released this past Monday and reported by Sharon Theimer (with contributions by Ted Bridis, Alan Fram and Ken Thomas) Toyota’s cozy relationship with Washington politicos was documented in riveting detail.

To wit: The Senate’s lead investigator is none other than West Virginia Democrat Jay Rockefeller, whose ties to the Toyota family go back to the 1960s and who was so personally involved with the site selection for Toyota's Buffalo, W.Va., factory that he, “slogged through cornfields with Toyota executives scouting locations and still mentions his role in the 1990s deal to this day,” according to the AP story.

Then there’s California Rep. Jane Harman, who represents the district of Toyota's Torrance, Calif., U.S. headquarters and who serves on the House Energy and Commerce Committee, which is also investigating Toyota's recall.

It’s not so much that Harman and her husband, Sidney, held at least $115,000 in Toyota stock according to her most recent financial disclosure report. It’s the fact that the company to which the couple owes much of their multi-million-dollar fortune, Harman International Industries (Harman Kardon anyone?), founded by Sidney Harman, sells vehicle audio and entertainment systems to Toyota. The two companies even teamed up on a charitable education project in 2003, according to the AP, when Sidney Harman was Harman International's executive chairman. He retired from the Harman board in December 2008.

The AP also reported that, “When leading Toyota engineer David Hermance died in a 2006 plane crash in California, Rep. Harman took to the floor to pay tribute, calling Hermance the ‘Father of the American Prius.’ ‘It was David's passionate approach and commitment to the environment that helped persuade a skeptical industry and auto-buying public to appreciate the enormous potential of his work,’ Harman said at the time. ‘In fact, Madam Speaker, my family drives two hybrid vehicles -- one in California and the other in Washington, D.C.’ "

Then there’s always Senate Republican leader Mitch McConnell. You remember him, right? He was one of the leading bashers of the Detroit automobile company executives when they appeared before Congress seeking loans in December of 2008. He was the same sleazeball who appeared at the Detroit Athletic Club three years earlier with his hand out, asking GM, Ford and Chrysler for political contributions for his re-election campaign. And yes, he's the same guy who said, "Kentucky is still reaping the rewards of its 20-year partnership with Toyota, and we hope to continue to do so for years to come," when he spoke at the 2006 anniversary of a Toyota plant there, according to the AP. They don’t call him Mitch “Whichever Way the Wind’s Blowing” McConnell for nothing, I suppose.

No, political lobbying efforts are nothing new, but Toyota’s lobbying effort (estimated to cost $5 million annually) is led by a squadron of Washington politicos with deep ties to Senators and Representatives on both sides of the aisle, the same Senators and Representatives who will be asking questions of Toyota on Wednesday. The same lawmakers who also represent states with Toyota factories, including Indiana, Michigan, Mississippi, Missouri, Texas and Kentucky.

Will our representatives directly and indirectly on the Toyota dole stand up and do the right thing on Wednesday? Or will they swiftly sweep all of this recall nastiness under the rug so as to minimize embarrassment to the company and so everyone can get back to the “business” at hand?

It will be very interesting to watch how this plays out.

The bottom line here is that Toyota’s American executives have calculatingly crafted a plan over the years that revolves around one unwavering premise, and that is to convince the American consumer public that Toyota is not only part of the American fabric but that Toyota is in fact an American company, and that to think otherwise is simply misguided and wrong. Never mind where the profits ultimately go - Toyota’s PR wranglers are quick to point out - instead focus on the fact that Toyota is inexorably involved in countless American charities, and employs thousands of American workers at factories, dealers and suppliers.

That’s all well and good, but as I’ve said before this image-wrangling business can be treacherous.

The blatant obfuscation of the seriousness and scope of the problem by Toyota’s Japan-based leadership only served to exacerbate the issues involved, which in turn prevented their American counterparts from getting out in front of the story, which in turn caused countless hand-wringing and negative stories in the media, which in turn exposed customers to a side of Toyota heretofore never imagined, which in turn caused a carefully cultivated image built up over the better part of three decades to blow up literally overnight.

And now every move Toyota makes, the new TV advertising, the public mea culpas, President Akio Toyoda’s announced visit to the U.S. in order to take the pulse of its employees, dealers and customers - to “genchi-genbutsu,” which is Japanese for “go and see” and is part of “The Toyota Way” business philosophy - seems forced, disingenuous and very, very late.

On this frigid February day in 2010 I can actually begin to see the media rhetoric shift away from the Toyota=Good, Detroit=Bad mantra that has dominated this market for years.

Now it’s Toyota=Incompetent, Toyota=Untrustworthy, Toyota=Unsafe, or worse, Toyota=Just Plain Bad.

And here Toyota was this close to having American consumers actually believing that it was as American as Baseball, Hot Dogs and Apple Pie.

Not so much. Not anymore.

That’s all I got for this week.

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